Isn't it nice when your bank pays you instead of you paying them? Competition in the banking market has opened up opportunities for you to get paid simply for opening a checking account.
Banks are often willing to part with cash, gift cards, interest-bearing checking accounts, or other rewards in order to gain your long-term business. These promotional deals usually last for short periods of time and can come with various qualifying criteria and limitations, but given the wide variety available, you should be able to find one that fits your needs.
What do the banks ask in return for these rewards? For starters, most deals are targeted at new customers; therefore, to qualify, you must not have had an account with that bank within some period of time (usually anywhere from the past several months to a year). There may also be a minimum amount of time that you are required to keep the account open. However, as you would expect for a bank, most of the bank's requirements are related to cash.
A minimum cash deposit will be necessary to open the account, and often there will be an accompanying minimum balance to receive the rewards. Some accounts may require the use of direct deposit. Others may require that you use automatic bill pay or have a minimum number of transactions per month.
As with any financial transaction, it always pays to shop around. When considering your banking options, be sure to look beyond promotional offers to the fee structures and the terms and conditions associated with the account. Compare offers from several banks to verify that you are not receiving a better promotional deal only to eventually pay it all back and then some through fees. At the same time, evaluate any perks that fit your needs, such as free overdraft protection.
Pay close attention to which fees you are most likely to incur. Incentives are often offered to change the fee structure, such as waiving monthly service fees if a specified minimum balance level is maintained every month. Review your usage habits to see if they would neutralize some account expenses, and then consider whether you could handle extra fees in case of emergency (for example, if a short term cash flow problem drops you below the minimum balance required).
Rewards can range up to $400 for opening an account, but that size of reward usually requires a large deposit and a high minimum balance. Look for options that meet your expected minimum balance level.
Is online or mobile banking useful to you? Many banks are refining their offerings outside of brick-and-mortar facilities to increase efficiency for both the bank and the customer. As you consider your promotional options, take the time to review each bank's online and mobile banking options. Search for online customer reviews of each bank's app as it relates to your smartphone's operating system and look for the most convenient and reliable choice.
If you have other financial needs such as a new checking account or certificates of deposit (CDs), check with your candidate banks to see if promotional package deals are available. For example, banks may offer CDs with higher interest rates if you open a checking account and maintain a certain balance level through the life of the CD.
If you plan to open a checking account, why not seek one that provides extra benefits? Take advantage of the opportunity for the bank to pay you, because those opportunities do not come around very often.
If you want more credit, check out MoneyTips' list of credit card offers.